Leighton’s reputation is back in the spotlight and investors are not happy about it.

While chief executive
Hamish Tyrwhitt
has been trying to clean up the mess the former management left behind, the company’s long history of cover-ups and questionable corporate governance is haunting him.

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Importantly, it says it is not aware of any new allegations of ethics breaches.

That goes to the heart of the problem though. Leighton on Thursday reiterated it reported a possible breach of its code of ethics to the Australian Federal Police in 2011. Leighton made the information public, with the AFP’s approval, in February 2012.

However, the documents obtained by the Fairfax Media investigation suggest that former chief
Wal King
and other executives were warned by a whistleblower in 2009 that a pay-off had been made in relation to construction of a barge in Asia.

A memo handwritten by then acting CEO
David Stewart
on November 23, 2010 says he had been told by another executive that Mr King knew a $87 million payment had been made to a company in Monaco nominated by Iraqi officials in order to win the Iraq contract.

King received a severance package of around $30 million when he left Leighton in 2011.

Even if Leighton executives were unaware that the practice of paying kickbacks to win contracts was rife then they should have been.

Leighton’s past and present management have clearly failed to adequately investigate the issue. It will serve as a lesson for other companies who think they can gloss over a problem with a token investigation.

The allegations also put the spotlight back on the effectiveness of the corporate watchdog and the ability of the AFP to deliver results from long-running investigations.

The rest of corporate Australia was sitting up and paying close attention to the Leighton story on Thursday morning.

Many of the former Leighton employees at the centre of the allegations also sit on the boards of other Australian companies, including
Russell Waugh
, who is a top executive at UGL. King also sits on the board of Coca-Cola Amatil.